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    Petra williams final Petra williams final Presentation Transcript

    • Going Global:A two step approachto Scalability and Growth Petra Williams, Senior Global Controller Former Finance Transformation Lead, Cisco SystemsPresentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 1
    • Agenda  Introduction to Cisco  Overview of Finance environment  Changes necessary to align with Business  View on our latest evolution  QuestionsPresentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 2
    • The Cisco Vision… Changing the Way We Work, Live, Play, and LearnWork Live Play Learn to shape the future of the Internet byThe Cisco Mission… creating unprecedented value and opportunity for our customers, employees, investors and ecosystem partnersPresentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 3
    • Challenges to Finance at Cisco 1991-2000 2005-2008 2012• Company growth • Re-ignite Sales Growth • Busy in BRICs (56% CGR) • Emerging Markets • New Business Models• Acquisition activity • Acquisitions restart (over 80) 2000-2004 2009-2011 • Slowing economy and • Global Markets Slow changing market conditionsPresentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 4
    • As we moved past 2005 other Cisco forces began toshape how we organized for the future  Cisco growth +15%: evolve organization to enable and sustain growth  Emerging Markets growth 35% +: develop long-term solutions for global scalability  Increasing business complexity: more diverse customer, product & geographic mix  Organization realignment to address customers holistically  Cisco evolving: globalization, regulatory requirements, emerging markets, business model, mergers and acquisitionsPresentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 5
    • Where were we by 2005?  Finance organised by Region  ERP instance per region  Systems only processing US GAAP  People based in country in traditional model  Variety of local in country processes, often manual Needed a SCC to help scale to changing business cycles and cope with economic challenges and business opportunities brought by organic or acquisition growth of the futurePresentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 6
    • Finance and Accounting Shared Services Today Record to Report (R2R) Quote to Cash (QTC) F&A combines our  GL accounting functional, process, and geographic expertise to  Billing  Fixed assets and  A/R provide integrated best-in- other B/S accounting class service offerings  Collections  Statutory reporting  Royalty accounting Delivering to Ciscos multiple lines of business Procure to Pay (P2P) Hire to Retire (H2R) Enabling ―Support the Business‖ growth in  Payroll  PO & VM scalability, quality and  Stock Administration  Accounts payable productivity  Expense managementPresentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 7
    • What Did we tackle first? Phase I - Regional Shared Service Centre program (May 2006)  Rebuilt ERP platform for Established Markets  Six Sigma review for systems deployment in Emerging Markets  Process centric methodology, simplification and alignment  Split of Front Office and Back Office, Dedicated Deals desk and Revenue teams, new verticals for SSC tracks  Creation of Business Partner Finance Manger RolePresentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 8
    • Location Evolution: Phase 1 - Regionalisation Amsterdam San Jose Tokyo SingaporePresentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 9
    • Global Center Enabler Prior state GC Creation  High cost  Centralized delivery in lower cost location will help F&A become Efficiency  Too decentralized more cost competitive  High cost locations  Reinvest savings into further F&A improvements  Service quality and customer  Drive more consistent, satisfactory sat in need of improvement service experience Effectiveness  Inconsistent service  Allow non-GC resources to focus experience on more value-added activity  Too much non-value added  Better controls & risk management activity through centralization  FASSO capabilities has not  Catalyst to drive common Flexibility / kept pace with growth & business architecture scaling to Scalability increasing business meet Cisco‘s growth and complexity increased business complexity  >50% of work focused on non-  Leverage & integrate future transaction processing investments more quickly and  Emerging Markets not scalable effectivelyPresentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential  Enabler for Emerging Markets 10
    • The Steps To Globalization… Define Model Define the Strategy Gain Sponsorship Criteria Defined Select Vendor Contract Negations Implement Plan Project team Enable with people, processes and infrastructure Operations Center Stabilization Web 2.0 and Collaboration Operationalize Operational Metrics GovernancePresentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 11
    • Hybrid model (Managed Captive) was the Best Option In-house Hybrid (Managed Captive) OutsourceModel: = Cisco controlled Mgmt Mgmt Mgmt = 3rd party controlled Functional Functional Functional supervisors supervisors supervisors Individual Individual contributors Individual contributors contributors Description:  Build and operate Global  Operate Global Center internally  Transfer responsibility for Center internally  Use 3rd party to provide majority operations to a 3rd party of staffing and help develop  Manage to a service level Global Ctr (‗managed captive‘) Financial:  Highest savings and  High savings and investment  Moderate savings and investment investment Non-Fin  Slow to implement due to  Faster since leverage vendor  Fastest option leverages benefits: mgmt time required; little capabilities; high vendor capabilities capability/scalability scalability/flexibility with option to improvement bring work in & out Risks:  High risk: No management  Medium risk: Must manage  High risk: Lose control / must experience transition and remote operations manage transition & supplier through GSD‘s ―in-between‖ position Hybrid model (Managed Captive) offers best mix ofPresentation_ID savings, other benefits & risk © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 12
    • Key Transition Elements Stabilize & Knowledge Transfer/ Planning Improve Implementation Center Planning & PMO Knowledge Transfer Stabilize & Improve • Establish PMO • Establish knowledge Transfer process: • Develop detailed plans - Documentation requirements: • Establish on-going • Kick off project - Current state center policies & • Project oversight - Future state practices - Define service levels • Ongoing training - Training requirements HR/OA • Institute quality - Transition of work framework and teams - Transfer of documents • Develop HR strategy • Test DRP and BCP on • Develop comm strategy Implementation routine basis • Set up HR function in new • Set up new facilities: center - Define facility requirements : • Build culture in new center - Secure and build out new facilities • Separation support in - Acquire & set up office equipment existing locations • Set up tech. infrastructure - Design/define requirements - Acquire equipment - Build out & test • Wind down existing facilities & technology Program Management Office (PMO)Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. HR / Organization Adoption Cisco Confidential 13
    • Multi-Wave, Accelerated Transitions 2008 2009 FUSION Transition Overview Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Process Tower Gantt Chart End yearWave 1 I2P Wave 1.0 India Wave 1.1 Singapore Wave 1.2 USA Wave 1.3 Europe Wave 1.4 Tokyo Wave 1.5.1 (A) CEE, MEA & Small Euro Wave 1.5.2 (B) LATAMWave 2 I2C Wave 1.0 Singapore Wave 2.2 Tokyo Wave 2.3 USA Volume Ramp Wave 2.4 EuropeWave 3 R2R Wave 3.0 India Wave 3.1 Singapore Wave 3.2 Tokyo Wave 3.3 Europe Wave 3.4 USA Wave 3.5.1 (A) CEE, MEA & Small Euro Wave 3.5.2 (B) LATAM KT Planning Job Shadowing/Remote KT (for EM and US R2R Waves) Delivery Center Training Coaching/Stabilization Go LivePresentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 14
    • Phase 2 – Globalization .... A New Delivery Model Four Established Shared Services—Regional Centers  High touch  Statutory Theater/Country requirements  Localization Services and Support Amsterdam  Provides multiple language San Jose Tokyo support capabilities Bangalore Opened Fifth Shared Service Center—Global Center Singapore  Co-managed by Cisco and Partner  Driving efficiency to enable scalability  Provides multiple language support capabilities  Global Process OwnershipPresentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 15
    • Vendor Selection – Lessons Learned  Staying Aligned to Business Strategy  The up-front work of identifying the problem and defining the objective helps keep everyone focused  It takes a strong team – commitment, open mind, communication  Leverage makes a difference Playing position Knowing each others role & playing to strengths  Executive Support & Trust On-going Communication Keeping on task & Keeping to the factsPresentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 16
    • Key Lessons Learned  Joint theatre-level transition management and business process leadership  Retained team planning (Org charts, leveling reviews, job descriptions)  Well designed and orchestrated global communication and announcement  Knowledge transfer & training curriculum maps  Leverage global, standard DTPs, technology solution / platforms to minimize gaps and adhere to the standard  Governance Structure – clearly defined; detailed walk through of ―Paper to People‖ flow  Readiness Reviews  Infrastructure – don‘t underestimate building/technology needs & resourcesPresentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 17
    • What did we achieve?  Model: Phase II concluded - Europe (2008), Emerging (2009)  Systems: 2010 concluded Oracle ROI model & Oracle R12  Process: Aligned by global process not by ‗theatre‘  People: Partnering, GPM‘s, Councils, Change Managers  Policy: Global from Strategic Enterprise Program Managers  Portfolio Management…..People, Process and Technology ….So better prepared to support businessPresentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 18
    • Post Globalisation – What Next & Why  First Globalisation, then Stabilization, next continued evolution  Options: More of the same scope - for new entities New scope - for same entities -move up the value chain New Finance groups in scope – Sales Finance, Channels… New groups outside Finance – Marketing and more  Retention of Regional Hubs as Centre of Excellence Incubator…..Standardizing new tasks for globalisation  Leadership, Collaboration and CRM skills Organisational evolution - Virtual Controller role Leveraging technology to work across borders Strong Change management skillsPresentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 19
    • F&A Services Next Evolution Certain activities are stronger candidates for outsourcing, while others are more likely to be retained. Strong outsourcing candidate High Possible outsourcing candidate Strong retained candidate Corp. Svc. & Mgmt. Value Added Decision Support Financial Planning & Analysis Accounting & Reporting Basic Revenue Cycle Disbursements High Complexity of Interaction Basic * Payroll may report to CFO or HRPresentation_ID © 2007 Cisco Systems, Inc. All rights reserved. Cisco Confidential 20
    • Potential Scope Expansion OpportunitiesPRELIMINARY Second priority First priority High Cisco Org. WWSFOps CSF—Country Rev. controllers recognition Rebates Business Ops Benefit Fin GSO potential Cisco Process CSF—CA GSMCost savings Capital reqs PO Finance Accg. Expertise team Tax QTC Benefits Commissions Quality Other GCCO Service Manu. SSC Tax/treasury Flexibility (standard costs, inv. Cisco Capital Acctg) Stock CA Fin admin. (Spare parts, def. rev., etc.)* Treasury Low Not feasible Second priority Difficult Easy Suitability and ease of implementation Strategic relevance Stable and mature processes Complexity of migration Regulatory and other restrictionsPresentation_ID © 2007 Cisco Systems, Inc. All rights reserved. Cisco Confidential 21
    • What did we do next to evolve?  Natural Stabilization period Operational Excellence program Further transaction transition from hubs  Organizational re-design Entity Support Model Cisco Captive  3rd Party Relationships Improved OE Evolved EY/ACCN relationship for Stat & Tax returns Engaged ADP to drive Payroll evolution into regional hubs  Country Enablement Supported organic growth & new business models eg. Utility based billing Accelerated acquisition integration with new systems strategy & BPOPresentation_ID © 2007 Cisco Systems, Inc. All rights reserved. Cisco Confidential 22
    • Shared Services JourneyF&A Shared Services model continues to evolve… Deploy ESM and drove Country Enablement Deploy Oracle R12 & design Entity Support FY‘12 3rd party BPO Model evolve from hub to Global processing FY‗10 Co-location: FY08 35 geographic locations into four regional centersPresentation_ID FY06 © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 23
    • Shared Services Model Expected BenefitsEfficiency High cost—Cost was Low cost Improved efficiency overall not a consideration provider “Competitive”Effectiveness Higher quality of service Global consistency of services Keep Industry Improved customer satisfaction lights on standard “Top Quartile” Improved operational metrics Improved employee satisfaction and retentionFlexibility/Scalability Ability to meet needs of Cisco‘s existing changing business models Standard Fully custom offerings offerings Ability to grow with Cisco‘s rapid growth “Segmented offerings and Ability to integrate acquisitions Service levels”Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 24
    • Accomplishments  Establishment of F&A SSO Delivery and Service  ―Operationalization‖  Extended Quality & Service  Globalization and Consistency of Processes  Evolvement of Organization  Flexibility to support the businessPresentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 25
    • Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 26